Postal Service Scrambling to Keep Local Offices Running

The U.S. Postal Service, following pressure from U.S. senators to keep rural post offices open, said it plans to cut hours at as many as 13,000 locations to save $500 million a year, rather than close the smallest ones.

The service, scheduled to announce its second-quarter financial results tomorrow, will close “very few” post offices in small communities, Chief Operating Officer Megan Brennan said today at a press conference in Washington.

“We took a step back and reconsidered whether there was a way to preserve post offices in small communities and at the same time accomplish cost-saving goals,” she said at the service’s headquarters.

The Postal Service, which lost $3.3 billion in its first quarter ended Dec. 31, said last year it planned to close as many as 3,700, or 12 percent, of its post offices. The service is trying to cut costs as mail volume falls by reducing its workforce and asking Congress to relieve its mandate to pre-fund retiree health benefits. It had about 650,000 employees at the end of the year, the service said in a February filing.

Postmaster General Patrick Donahoe said today that keeping rural post offices, 88 percent of which lose money according to the service, will help the service bargain with Congress to change the health-benefit mandate and get a refund of money the service says it’s overpaid into a U.S. government-employee retirement fund.

Part-Time Workers

Post office closings will no longer be part of the service’s strategy for slowing annual losses forecasted to grow to $18.2 billion by 2015, Donahoe said. Visits to post offices have dropped 27 percent, or 350 million, since 2005, the service said.

The service had expected $200 million in savings from post office closings.

“In many of these locations, we will be substituting a part-time employee for a full-time employee,” Brennan said.

The service’s self-imposed moratorium on closing post offices and mail-processing plants lifts May 15. The service will announce its plans for mail-processing plants on May 17, Donahoe said.

Senators including Scott Brown, a Massachusetts Republican, and Tom Carper, a Delaware Democrat, asked the service in an April 30 letter to extend the moratorium, saying reducing infrastructure wouldn’t help right the agency’s finances.

The service won’t extend the processing-plant closing moratorium, Donahoe told reporters after the press conference.